Does a car accident claim affect your insurance cost?

Does a car accident claim affect your insurance cost?

InsuranceQuotes.com hired researchers to answer this question. They created a hypothetical 45-year-old employed, married driver with no previous claims and got rates from 6 companies in all 50 states.

They found that, on average, making a claim on an insurance policy caused premiums to rise by more than 40%. The average annual cost of car insurance is $815. If you made one claim for $2000 in property damage, your annual bill would go up by about $335.

In some states—California and Massachusetts were the biggest offenders— your insurance premiums can nearly double after one accident claim. To make matters worse, most accident claims affect your car insurance for up to 5 years. Your total car insurance cost in that time: $6,000.

Insurance companies say one claim doesn’t hurt you

If you were in an accident that wasn’t your fault, your insurance rates should not be affected. It is worth noting that the insurance claims adjuster decides if you had any responsibility for the collision.

So what happens if you hit a parked car and make a $2000 claim for the property damage?

Several big insurance companies promote “accident forgiveness” in their advertising. It sounds good: an experienced driver with a clean record shouldn’t be gauged for car insurance after making one claim.

Liberty Mutual is running an ad campaign about accident forgiveness.

They don’t mention that you would need a premium insurance policy. Or that “accident forgiveness” adds another 10% to your insurance cost. Or that “accident forgiveness” doesn’t mean they can’t drop you when your policy comes up for renewal.

This is incredibly frustrating for consumers. You pay your auto insurance dutifully for years, only to be gauged when you actually use the service for which you paid.

But even if your insurance company offers you “accident forgiveness”, your claim is going to cost you.